Hope Alone Will Never Heal Family Conflicts

Lotte: Family Feud

Founded in 1948 in Tokyo by Shin Kyuk-ho, the Lotte Group started off as a chewing gum distributor to children in post-war Japan. Nearly a decade later, Shin expanded the company to South Korea and became the country’s largest confectionery manufacturer.Lotte group engages in several industries, such as shopping, entertainment, finance, hotels, and food.

The feud began on July 27 2015 when the 92-year-old Shin dismissed his younger son Shin Dong-bin, the chairman of Lotte Group, along with six board directors. According to the Korea Herald, Lotte Group lost billions of dollars from its operations in China over the past four years, and Dong-bin had reportedly failed to report the losses to his father. Dong-bin held an emergency board meeting and staged a coup to remove his father as general chairman of the company’s holdings. The younger son kept both of his executive titles. The move angered Shin Dong-joo, who called his father’s demotion unlawful. In January 2015, Dong-joo himself was fired after his father discovered that he had overstepped his role by meddling in the management of Korean operations.

Lotte chairman clinches ultimate victory against brother

The long-running family feud between Lotte Group Chairman Shin Dong-bin and his older brother Dong-joo has apparently ended after the latter disposed of a large stake in the group’s key affiliate. The nation’s fifth-largest conglomerate said Thursday that former Tokyo-based Lotte Holdings Vice Chairman Shin Dong-joo sold a 6.88 percent stake in Lotte Shopping ― 1.73 million shares ― through a block deal for 391 billion won ($342 million).

Group founder Shin Kyuk-ho’s oldest son now holds just 7.95 percent of Lotte Shopping, while his younger brother has 13.46 percent.

The siblings have been fighting for control of the retail giant since July 2015, engaging in a fierce legal battle. But the older brother appears to have accepted defeat in the uphill battle for now, according to industry watchers.​

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NEW YORK. NY. On September 3, 2008, at the Republican National convention, former New York City Mayor Rudy Giuliani was the first to use the phrase “hope is not a strategy. Specifically, his convention speech included these words:

“Because ‘change’ is not a destination, just as ‘hope’ is not a strategy.

What Does It Mean? When Mr. Giuliani used the quote in late 2008, he was saying that Obama – and any other president – needs to act.

I am connecting this message to family members who are suffering in silence because of deep conflict within the family and indecision.

Hope Supported by Action

You cannot just hope and wished that the issues will just go away. As a family member, you need to muster enough strength to initiate and act on the problems that are causing tension within the family and have likely spread to the business.

The patriarch/matriarch must act to mitigate the problems. Just sitting around thinking about how the current situation could be better is not going to change anything.

The fact remains that the following problems will never be resolved by just merely hoping for the best:

Hope will never address the confusion as to where the business is heading

Hope will not reduce misunderstandings among siblings/cousins

Hope will never resolve personality differences

Hope will not cure the incompetence nor can it terminate unqualified/ dishonest family members

Hope can never manage frequent power struggles among siblings/cousins

Hope will not create ownership alignments/agreements

Hope will not mend emotional outbursts and constant finger pointing and cursing

Hope can never cure greed nor will it fix a slew of conflict of interest or self-dealing activities by family members

Hope will not remove from the business entrenched inept but entitled in-laws

Hope cannot heal a scarred relationship

Hope can never promise nor offer solutions to a mismanaged enterprise nor will it help correct a bad P&L (Profit and Loss) financial statement

Hope cannot prevent a family member from selling his or her shares to a competitor

Hope cannot prevent a catastrophic failure of both the family and the business

Just hoping is plain and simple procrastination!

I can list more issues but one thing is crystal clear, hope is not a strategy. Without any means to address these deep and frightful issues, it will be a bruising struggle for power that will result into more disputes, further antagonizing members and weakening the very foundation of the family business.

If there is continued inaction, these problems can cause entropy and will scar the family and the business forever. The consequences of inaction are irreversible.

Objective Intervention Is Important

The best and only option is for family members agreeing on solutions and subsequently formulating family agreements. To avoid making the issues less personal and ensure greater objectivity, it is imperative for the family to engage the services of a third party facilitator who will propose initiatives leading to the creation of mutually agreed governance policies defining the roles and responsibilities of family members active and not actively working in the business.

The good news is that most family related problems are predictable and initiating policies before they happen or morph can eliminate or reduce further tension and will de-escalate a brewing conflict when the founder or patriarch is no longer around.

Do not get me wrong, hope and prayer can work in the face of a difficult situation, but family members need to act and do their part now. There is still time.